About the author:
Geoff Raby: Former Australian Ambassador to the People's Republic of China (2007-2011), Chairman and CEO of Geoff Raby and Associates
Recently, many countries around the world are going through, or just have finished, a leadership change. It is clear that voters in many democracies, for example, the United States and Brazil, are expecting that a change of leadership can facilitate the governments to solve their longstanding issues, like the pandemic, economic issues, as well as social division. Is it reasonable?
That's the nature of democracy. After all, democracies provide their citizens with opportunities to change the government if the citizens are unhappy with their performance. And it's one way of looking at the large number of changes that have happened in the course of the last year in political leadership. I think that's quite reasonable to say that there seems to be a pattern or a trend here. But there's another way of looking at it and one has to be careful not to, if you like, over-aggregate these things.
For example, the UK has had three prime ministers this year, but they are all from the same party. All that happened is that the leadership of the party has changed, but the party is essentially the same. Its policies are pretty much the same. No one, for example, is advocating going back into Europe to reverse Brexit, which would be a momentous political event, even though a large majority of the people in the UK now think Brexit was a mistake. And then if you look at the most recent midterm elections, you can interpret it as a country that's evenly divided between Republicans and Democrats. The vote was very, very close, both in the Senate and in the House.
But on the other hand, you could look at this as a convergence back to the political center ground, because the extremists that have rallied around Trump, the types of people that are very unhappy with globalization, with income inequality resulted from that, and with pandemic lockdowns, you name it, are no longer in the center of the stage. The populist right wing did not do well at all and was voted off the stage. So, in many ways, we see a convergence to more centrist politics. And then again, in Australia's case, yes, we changed the government in May of this year. We had one government for ten years, and that's a long time. So, all I'm saying on this is there are a lot of political changes. It's extremely important to take note of it. But it doesn't necessarily mean that there's any great turbulence in the politics of these countries. In fact, I would say, if you look at the United States, we may be now entering a period of less turbulence.
Do you think that the United States, the United Kingdom, as well as some European countries facing the rise of far-right wing parties, like Sweden, are experiencing similar circumstances, considering their political trends?
I think all countries are seeing a growth in populism, both on the right wing and left wing. In Europe, the trend manifested itself around issues like immigration. Growth slows, income inequality increases, and then you get a backlash against immigration. You make it into a backlash against the elites who seem to be benefiting at a time when more people are suffering. But this could come both from the right and the left.
Another question is that when facing current international problems, like the Ukraine crisis and worldwide inflation, as well as growing social division, do you think that the current international institutions and mechanisms are still strong enough to solve these problems and unite the world?
That's a really excellent question. And it's very hard to answer. For sure, the current global institutions very much need reforming. They need to be brought up to date with the modern world. The big Bretton Woods institutions like the IMF and the World Bank still don't reflect the weight of China, as well as the East Asian economies, in the world economic order. About six years ago, China created the Asian Infrastructure Investment Bank, and that was a real indication that the existing institutions need to change.
Having said that, all of the issues you have enumerated, whether it's pandemics, global inflation, the energy crisis, or climate change, above all, all of these issues require global solutions. None of the things you or I have just mentioned can be dealt with at the level of a national economy or a national government. They all require global arrangements. So, it is important for all the major countries in the world to recognize that we now have a multipolar order instead of a unipolar order. And then that really puts a responsibility on many more countries. In the past, we nearly all looked to the United States to provide global leadership on these matters and to solve essentially global problems on our behalf, and it did so by creating multilateral institutions. I think we still need those institutions, but it's incumbent upon many other countries, like China, obviously. We see Asians standing to show more leadership here. For example, India, to some extent, and the African Union. We really need all participants now in the global system to do their bit, pull their weight, and recognize that none of these problems that are causing so much concern within domestic economies and domestic politics can be solved by any country acting alone. It requires a much higher level of global coordination and much greater commitment by countries to work for our global public goods.
As you mentioned, we need global unity to solve long-term questions and provide long-term solutions. And I had a discussion with Mr. Alfredo Montufar-Helu from Mexico on the topic. He pointed out that the current international institutions require a transition or modification, but different parties have different views on how to modify it. The Europeans and the United States have their own ideas, and also China has our set of mechanisms and international and regional organizations. The opinions of different parties are somehow divided. What’s your perception towards such a division?
I think that's exactly right. And I agree that that's a big challenge. But in international relations and diplomacy, everything is a challenge, and that doesn't mean we don't try. In the course of events, things change for the better. For example, the WTO, which I was once the ambassador to, is one of the most important major global institutions. And I would point out to every reader that since the GATT, which was formed in 1947 and is the precursor to the WTO, which was established in 1995, there has not been one war fought over economic and commercial matters. History before then had seen many global and regional conflicts fought over economic and commercial matters. So, the WTO is not only a major contributor to open markets, stronger economic growth, better income, and opportunities for all countries around the world, but also a major institution contributing to world peace.
Now, disappointingly, the United States has decided to substantially reduce its involvement in the World Trade Organization, and has caused great damage through its refusal to appoint judges to the dispute settlement mechanism of the WTO. But that doesn't stop the institution from evolving and changing. The Director-General of the WTO Ngozi Okonjo-Iweala is from Nigeria. This is the first time that an African has been the head of the WTO, and the first time a woman has been the head of the WTO, which shows change is possible.
This week, she's in Australia talking about it's time to move on from multilateral trade negotiations like the Uruguay Round, the big, complex, decade-long negotiations, to more what they call plurilateral, issue-specific negotiations, as a way of continuing to strengthen the WTO. And I think most countries now will support that. I think we are seeing a transition and a reform of this very significant institution. Equally, as I said, I mean the fact that in 2014, China created the Asian Infrastructure Investment Bank with Australia’s support. It did so because it could not reform the IMF and the World Bank for the Americans and the Europeans would not allow it. I think that the system will evolve in this way. But I’d come back to my fundamental point. You can't have a system without these major institutions, because the problems the governments are to address require global solutions.
So, we're having more and more regional involvement, but we also need global mechanisms to unite countries together to solve international problems. So, given your rich experience in economics and international relationships, what do you consider is the best way for countries, both internationally and domestically, to address the current set of issues?
That's a huge question. I might be a diplomat, but I'm not God! That's a challenge. First of all, I think, always, when dealing with problems, you need to disaggregate them and not let them all come together and assume that they're all one and the same thing, or come from the same cause. And once you start to disaggregate them, you’ll find that there are smaller, solvable problems that you can use as building blocks. No one can deny that the most pressing problem we have to deal with is climate change. Wherever you go, wherever you look, there are extreme weather events. And everyone, it doesn't matter if you are rich or poor, from the First World or the Third World, the Global North or the Global South, everyone is experiencing this. We've just been through the COP27 at Sharm El Sheikh in Egypt. It was difficult, but an agreement was found whereby developed countries should compensate the developing countries for their efforts to take measures to reduce their carbon emissions. This is something that should have happened a long time ago, and it's now happened. For sure, the details must be worked out, but that will come given that there is a threshold agreement. And this is a moral obligation and now a political obligation on the wealthier countries to help the poorer countries address the transition to a low-carbon economy.
That's a very good example of what can be done. It may not be fast enough, given the climate change emergency we're facing, but it gives me confidence. I mention the WTO Director-General’s visit to Australia, and she's talking about, I think, finding new ways to move forward with trade agreements on the multilateral level with global support, and certainly the support of Australia. We've also had two weeks of quite significant summits in East Asia, including the G20 Summit, the ASEAN Summit, the ASEAN+ Summit, and the APEC meetings. And it was great to see the leadership of China, the United States, Australia, Japan, and all other nations of the whole region present, and the leaders talking about these issues. And that gives you a real sense, I think, that there is a vitality still in these institutions, and leaders do understand that they need to work together to find solutions. And I think more of that is very important as well. And also, countries like Indonesia, as a result of the chairmanship of the G20, have stepped forward on the world stage and established points of consensus at a very difficult time. So again, it shows you what can be done, but it needs to be done patiently and deliberately, and it's important not to lump everything together, but to find specific, achievable things that can move the whole system forward.
Taking the environmental problem as an example, we are facing geopolitical tensions and all kinds of domestic concerns that endanger the world environment. For example, Germany is reopening their coal fire plants. But now we have this COP27. And also, we had the G20 Summit, when President Xi and Biden had a meeting. And also last week we had the talk between the Prime Minister of Australia and President Xi. These geopolitical tensions seem to be easing, and a better international environment will surely facilitate domestic development. Do you consider this a good signal that the nations and countries across the world are uniting together again, and the geopolitical threats and the extreme concerns are fading?
I confess to being ever an optimist about these things. And I'm an optimist because all the alternatives are much worse, so it's worth being optimistic. And yeah, that's my reading and I would share your view. I think there is some stepping back from the geopolitical tensions that have been a significant factor in the past five years. I think that there's a recognition that in the new world order, there has to be strategic space found for everyone. It doesn't mean the transition from where we are today, or where we were yesterday to where we will end up is going to be without friction or tension. But I do think there's a greater recognition that the order has changed. We're not going back to what existed in the past, and we now have a multipolar world where there are many actors that are significant and are a part of the solution. As I mentioned, I think as a result of the last two weeks, Indonesia has emerged as a very key player in geopolitics. I think ASEAN as a whole shows a very important way to position itself, in the geopolitical contest between the United States and China. Now, this is a fact of life. China is an ascendant power, and the ascendant power, whether it wants to or not, by definition, challenges the dominant power. And as we've seen all through history, the dominant or status-quo power will find ways to resist the ascendant power. But it doesn't mean that over time, you can’t find accommodation between an ascendant and a dominant power.
And it's even possible for an ascendant power to see that it's in its own interests to support the dominant power’s position of dominance. China, for example, has got tremendous strength. Its economy, although has some issues now, still has great potential in the future, once it works through COVID and the leveraging property sector and a few other problems. It has tremendous potential still for the future, in my view. And of course, China has built a very big and powerful military. But does China really want to take the leadership role to provide global public goods in the way the United States has? Or maybe it's a more comfortable position, and better for China's interests to support the dominant power in areas where there are common interests, for example, climate change, financial disruption, and energy security.
I think too often this discussion gets reduced to binary positions – one’s up, one’s down, one’s right, one’s wrong, whereas I think there are a lot of grey areas. And to your question, which I think is a very astute and good observation, my sense is we are moving into a new phase in terms of how the global order is managed, and, hopefully, into a much less confrontational one. Now we have a very concrete, clear example of that, with the new Australian Prime Minister at his meeting with President Xi. We've had five or six years of confrontation, as you know. I've been very critical of the confrontation between Australia and China. We have no historical problems. We have no contingent borders. We have big numbers of Chinese who live happily in Australia, and China is our largest export market. It makes no sense that we have been through this in the last five years. However, what happened is that after the meeting between President Xi and Prime Minister Anthony Albanese, the conversation has fundamentally shifted from confrontation to cooperation, to dialogue, and to valuing dialogue, above all else. That's a concrete example of, I hope, this new zone, or space, that the world order is moving into.
This article is from the November issue of TI Observer (TIO), which is a monthly publication devoted to bringing China and the rest of the world closer together by facilitating mutual understanding and promoting exchanges of views. If you are interested in knowing more about the September issue, please click here:
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